5m ago 08.35 GMT Rachel Reeves wound up her speech by promising to do what is right, not what is popular. She pledges the budget on 26 November will be a budget for growth that supports businesses to innovate. And she promises to do “what is necessary to protect families” as she takes decision on tax and spending. Share

13m ago 08.28 GMT UK borrowing costs drop as Reeves speaks The cost of UK borrowing is falling as Rachel Reeves outlines her priorities for this month’s budget. The chancelllor’s promise that she has an ‘iron clad’ commitment to her fiscal rules is probably reassuring bond investors. The yield, or interest rate, in UK 10-year bonds has dropped by 4.5 basis points (0.045 percentage points) to 4.39% this morning (from 4.43% last night). The yield on 30-year bonds has dropped by 5 basis points, to 5.166%. Those are relatively small moves, but certainly moving the way the Treasury would like to see. Share Updated at 08.30 GMT

16m ago 08.24 GMT Reeves promises ‘iron clad’ commitment to fiscal rules Rachel Reeves then insists that her commitment to her fiscal rules is “iron clad” – a signal to the financial markets that she will not sign off a debt splurge in this month’s Budget. She explains that £1 in every £10 of government spending goes on servicing the national debt. And she argues against calls for more borrowing, pointing out that there is a limit that banks and pension funds will pay for UK debt. She says: “The more we try to sell, the more it will cost us.” Reeves also pledges not to repeat the mistakes of the “cycle of austerity and decline” which has led the UK to its current situation. Share

21m ago 08.20 GMT Although interest rates have been cut five times this parliament (from 5.25% to 4%) they are still a constraint on the economy, Reeves says. [The Bank of England is due to set rates again on Thursday]. Share

22m ago 08.18 GMT In another criticism of previous governments, Rachel Reeves warns that years after austerity has led to capital investment being sacrificed. Share

24m ago 08.17 GMT Reeves then warns that it is clear that the UK’s productivity performance is weaker than previously thought. She says she won’t preempt the conclusions of the Office for Budget Responsibility’s assessment of UK productivity (reminder, there is speculation the OBR could lower its estimate of trend productivity growth by 0.3%). Share

25m ago 08.15 GMT Reeves: World has thrown more challenges our way Chancellor Rachel Reeves warns that years of “economic mismanagement” has limited the UK’s potential, leaaving to unrealised potential. She adds that the world has thrown “more challenges our way” since her first budget a year ago. She cites three factors: tariffs which have dragged on global confidence, dampening growth

inflation has been too slow to come down, with supply chains remaining volatile

the cost of government borrowing has increased around the world – something the UK has been particularly vulnerable to Share

28m ago 08.12 GMT Rachel Reeves begins her speech by saying she will make the choices necessary to deliver strong foundations for this economy. She says her budget later this month will focus on protecting the NHS, reducing the national debt and improving the cost of living. Share

31m ago 08.10 GMT Watch Rachel Reeves’s speech here: Rachel Reeves has just arrived to give her much-anticipated speech – you can watch it live here: Live Live Chancellor Rachel Reeves gives Downing Street speech – watch live Share

31m ago 08.09 GMT Stocks have dropped at the start of trading in London, although Rachel Reeves isn’t to blame. The FTSE 100 index of blue-chip shares has dropped by 70 points, or almost 0.75%, to 9628 points. It’s part of a wider sell-off in global financial markets, in what looks like a risk-off mood among investors. Mining companies are leading the fallers in London, with copper producer Antofagasta down 3.3%. Share

33m ago 08.08 GMT Reeves: Today I will set out the choices our country faces Rachel Reeves has just posted on X that she will “set out the choices” the UK faces. The chancellor wrote: The Budget this month will focus squarely on the priorities of the British people: cutting waiting lists, cutting the national debt and cutting the cost of living. Today I will set out the choices our country faces and the values that will guide my decisions. Share

45m ago 07.55 GMT UK Politics Live: Reeves to roll pitch for budget tax rises There’s obviously huge interest in Westminster, as well as in the financial markets, in Rachel Reeves’s speech – due to start at 8.10am GMT. My colleague Andrew Sparrow will be tracking events here. Rachel Reeves to give speech preparing ground for budget tax rises – UK politics live Read more He writes: David Cameron is credited with popularising the term “pitch rolling” in Westminster, to describe the process whereby politicians prepare the public for difficult announcements by shaping the argument in advance. It is a metaphor with connotations of a gentle game of cricket, and pleasant summer afternoons. Today Rachel Reeves is engaged in a classic piece of “pitch rolling”. But her task is more daunting. She won’t be flattening the odd bump; she has to shift some colossal PR obstacles, which is more a task for a fleet of JCB diggers. That is because, when she delivers the budget three weeks tomorrow, she will have to fill fiscal gap reportedly as high as £30bn. That means tax rises, which are never an easy sell. But it also means going back on the promise she made to the CBI last year when she said she would not need to raise taxes again on the scale she did in autumn 2024. And there seems to be a very real chance that she will also decide to raise income tax, which would be a direct breach of a promise Labour made in its election manifesto. Share

1h ago 07.39 GMT Goldman Sachs also expect tax rises Analysts at Goldman Sachs have predicted that Rachel Reeves’s budget could push down government borrowing costs, if she reassures the bond markets that she’s committed to tackling the deficit. In a research note released to clients last Friday, Goldman Sachs predict that the chancellor’s budget measures – and pre-budget hints about what’s to come – could knock up to 0.2 percentage points off the cost of borrowing (the ‘yield’ on a 10-year bond) for a decade. They explain: Given the modest downside impact on growth and inflation, plus the potential for increased credibility in the deficit path, we expect the budget measures to lower 10y Gilt yields by around 10-20bp, although given budget expectations are already forming we see this as a tailwind for Gilts into the budget more than the on-the-day reaction. Goldman Sachs also point out that UK bond yields remain the highest in the G10. They also expect tax rises in the budget, saying: The upcoming budget is set to tighten fiscal policy by around £30bn, which our economists expect will mainly comprise tax increases, including freezing income tax thresholds from 2028, broadening the NI [national insurance] tax base, pensions and property taxes. We expect limited spending cuts, but that the budget delivers a modest increase in headroom at the end of the forecast horizon. Share

1h ago 07.31 GMT Tax rises at Budget ‘inevitable’, thinktank warns This month’s UK budget will include significant spending cuts and tax rises to tackle “a significant deterioration in the public finances”, thinktank the Resolution Foundation has predicted. In a new report issued this morning, the Resolution Foundation predicts that Rachel Reeves’s fiscal headroom (the £10bn margin to keep within her fiscal rules) will have been more than wiped out by changes in the economic outlook, and government u-turns since March. That will create “a bleak picture for the public finances”, they say, as the independent Office for Budget Responsibility is expected to downgrade the UK’s ‘trend’ productivity growth by 0.3 percentage points, creating a £20bn shortfall. View image in fullscreen A chart showing a forecast for UK productivity growth Photograph: Resolution Foundation That downgrade will be partially cushioned by other changes, including stronger than forecast wage growth. The think tank says: The upcoming Budget is a make-or-break moment for the Government. It seems clear that this month’s fiscal event will include significant spending cuts and tax rises spurred by a significant deterioration in the public finances. The Resolution Foundation urge Reeves to take steps to increase her headroom, to as much as £20bn, to send a clear message to markets that she is serious about fixing the public finances. They have calculated that doubling the fiscal headroom to £20bn and allowing for cost of living support would require £31bn of fiscal consolidation. And with limited scope for spending cuts, tax rises of £26bn are therefore likely to be needed. Avoiding touching the three big taxes – VAT, Income Tax and National Insurance (NI) – “risks doing more harm than good”, they argue (even though Labour promised in their manifesto not to raise them). Resolution also argue that the chancellor could offset a 2p rise in Income Tax with a 2p cut in employee National Insurance, raising £6bn while protecting workers from these tax rises. Their report concludes: So, although tax rises are inevitable, there is a way to do them which comes with a boost confidence in the economy and the public finances, while also reducing child poverty and the cost of living. James Smith, research director at the Resolution Foundation, said: “The Chancellor should look to make sensible tax reforms to car taxes, dividends and capital gains. Switching 2p of employee National Insurance onto Income Tax would raise £6 billion while protecting workers’ wages Share Updated at 07.48 GMT